The Justice Department reported that fiscal year 2023 had the highest number of settlements and judgments in its history.
Settlements and judgments under the False Claims Act (FCA) exceeded $2.68 billion in the fiscal year ending Sept. 30, 2023, according to the Department of Justice (DOJ). And most of that money related to matters that involved the health care industry.
More than $1.8 billion of the 543 total settlements and judgments—the highest number in a single fiscal year in history—related to health care fraud.
Whistleblower, or qui tam, cases made up a significant amount of the recoveries. Whistleblowers filed 712 qui tam suits in FY2023, and this past year the Justice Department reported settlements and judgements exceeding $2.3 billion in these and earlier-filed suits.
Here’s a summary of the DOJ’s focus areas:
Medicare Advantage
In its annual press release, DOJ said it continued to pursue cases alleging false claims in the Medicare Advantage program, as it is now the largest component of Medicare in terms of federal dollars spent and the number of beneficiaries.
Examples of the cases include a settlement with The Cigna Group to pay $172 million to resolve allegations that it knowingly submitted and failed to withdraw inaccurate diagnosis codes for its Medicare Advantage plan enrollees to increase its payments from Medicare. In addition, DOJ accused Cigna of paying vendors to conduct in-home assessments of enrollees, and then improperly reported diagnosis codes based solely on forms completed by the vendors without performing or ordering diagnostic testing or imaging necessary to reliably diagnose the serious conditions reported.
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In another settlement, Martin’s Point Health Care agreed to pay $22.5 million to resolve allegations that it knowingly submitted inaccurate diagnosis codes for its Medicare Advantage Plan enrollees that were not supported by the patients’ medical records to increase reimbursements from Medicare.
RELATED: Martin’s Point Health Care to pay $22M to resolve Medicare fraud claims
In addition, the Justice Department continued to litigate other cases involving Medicare Advantage, including actions against UnitedHealth Group, Independent Health Corporation, Elevance Health (formerly Anthem), and the Kaiser Permanente consortium.
Unnecessary services and substandard care
The Justice Department also focused on providers who billed federal health care programs for medically unnecessary services and substandard care. Among the cases:
Cornerstone Hospital Medical Center agreed to pay $21.6 million to resolve allegations that the former long-term acute care facility knowingly submitted claims for services performed by unlicensed and unauthorized students, and services that were not provided or effectively worthless.
Saratoga Center for Rehabilitation and Skilled Nursing Care, related entities, and operators and owners Leon Melohn, Alan “Ari” Schwartz, Jeffrey Vegh, and Jack Jaffa agreed to pay $7.1 million to resolve allegations that Saratoga Center delivered worthless services to residents, resulting in medication errors, unnecessary falls, and the development of pressure ulcers, and that the facility’s physical conditions deteriorated to such a degree that the facility did not consistently maintain hot water, have an adequate linen inventory, or dispose of solid waste.
Unlawful kickbacks
Cardiac Imaging Inc. and its founder, owner, and CEO Sam Kancherlapalli, agreed to pay $85.5 million to resolve allegations that, with Kancherlapalli’s oversight and approval, Cardiac Imaging paid kickbacks to cardiologists in the form of above-fair market value supervision fees, to induce those doctors to refer their patients to cardiac imaging for PET scans. The United States alleged that these fees exceeded fair market value for the doctors’ services and included time the doctors were away from the cardiac imaging mobile scanning units or were not even on site.
Carter Healthcare LLC and its President Stanley Carter and Chief Operations Officer Bradley Carter agreed to pay $22.9 million to resolve allegations that Carter Healthcare improperly made payments to physicians under the guise of medical directorships to induce referrals of home health patients.
Other health care fraud
Lincare Holdings Inc. agreed to pay $29 million to resolve allegations that it fraudulently billed Medicare Advantage plans and Medicare Part B for oxygen equipment rental payments. While many Medicare Advantage plans and Medicare Part B “capped” oxygen equipment rental payments at 36 months, Lincare admitted that it improperly billed government health care plans for oxygen equipment rental payments and co-payments after it had already received three years of payments. Lincare not only admitted to improperly billing Medicare for oxygen equipment rentals, but also admitted to improperly collecting co-pays from beneficiaries and, as part of the settlement, agreed to timely identify and refund all beneficiary co-pays that it had improperly collected, and to implement additional corrective actions to ensure appropriate billing going forward.
Advanced Bionics LLC, agreed to pay more than $11 million to resolve allegations that it misled federal health care programs regarding the radio-frequency (RF) emissions generated by some of its cochlear implant processors, which can potentially interfere with other devices that use the same RF spectrum, such as telephones, alarm and security systems, televisions, and radios. The settlement resolved allegations that the company, in submitting pre-market approval applications to the Food and Drug Administration for the company’s Neptune and Naida cochlear implant processors, made false claims regarding the methods it used in its RF emissions tests.